Sinn Fein claimed that the Heads of Agreement peace plan was a retreat from the Conservative government's proposals and accused ministers of caving in to loyalist violence.
Mr McGuinness's stance dismayed observers, but hardline unionist politicians who are boycotting the talks sought to portray it as another republican ploy to gain further concessions - such as a British government apology for the events of "Bloody Sunday" 26 years ago.
Mr McGuinness said: "We have seriously considered the document and I think it is fair to say that this document has gone down very badly within Sinn Fein. Wider afield there is anger in the nationalist community that what we have effectively seen is a statement that the two governments have effectively succumbed to the Orange card."
The British and Irish governments presented the Heads of Agreement plan to the peace talks to get negotiations moving. It proposes a devolved administration for Northern Ireland, including an elected assembly with north-south bodies accountable to it rather than with executive powers of their own. The blueprint could also spell the end of the Irish Republic's historic claim to the North.
Mr McGuinness added: "We intend going to the talks to oppose the document. All we hope is that the two governments will face up to the mistake they have made."
Peter Robinson, deputy leader of the Democratic Unionist Party, which is outside the talks, said: "Sinn Fein are cleverly playing their negotiating hand to extract more concessions and the talks will continue to be the farce they have always been."
Mr Blair is believed to be ready to apologise for the killing of 13 demonstrators by British paratroops in Londonderry in January 1972, and to set up a fresh inquiry into the deaths.Reuse content